How Do I Become a Portfolio Manager?

If you find the stock market exciting and possess great mathematics and decision-making skills, you may wonder how to become a portfolio manager. Portfolio managers direct financial investments, either by advising individual clients on how to best increase their savings or by making decisions about where to invest company finances.

To put it simply, portfolio managers manage monetary investments. Lower-level finance employees called financial analysts often research potential investments, including investigating the company’s history, products and industries. Portfolio managers are responsible for making the decision on a company’s investment strategy or selecting and explaining an investment strategy to clients based on this information.

While portfolio managers have entered the field of finance through a variety of backgrounds, many aspiring portfolio managers choose to pursue degrees related to finance, including business, economics, mathematics and accounting. Because many investments have a basis in technology, other candidates come to the field of finance with an educational background in engineering, computer science, biology, physics or a physical science. Pursuing an advanced degree may provide more opportunities for career growth in the future. Some aspiring portfolio managers earn a Master of Business Administration (MBA) degree.

Aspiring portfolio managers often enter the field of finance as financial analysts or research analysts. Financial analysts and portfolio managers must develop a thorough understanding of financial concepts, including options pricing, risk management, mutual funds, exchange-traded funds closed-end funds and bond valuation. Once financial analysts have obtained a job, they can apply for licensure from The Financial Industry Regulatory Authority. After working for at least four years, they can seek certification, such as the Chartered Financial Analyst certification from the CFA Institute, which may help them advance their careers and ultimately become portfolio managers.

Careers in finance, like portfolio management, revolve around determining the most profitable investments based on research. Analytical skills and decision-making skills are necessary for success in this career. Candidates should also be detail-oriented, since the seemingly small financial and company details may mean the difference between a winning investment and a losing investment. Like other careers in finance, the portfolio manager should be comfortable working with numbers and using cutting-edge computer software to accurately analyze information and make the most informed predictions possible. Portfolio managers should also have excellent communication and leadership skills.

Though making major financial decisions may sound stressful, portfolio managers often enjoy the challenge of evaluating risks and making investment decisions. They may also enjoy a profitable salary. The Bureau of Labor Statistics reports that financial analysts earn a median salary of more than $74,000 each year. suggests that portfolio managers with at least five years of experience in finance can expect to earn a median annual salary as high as $104,325.

If you possess excellent analytical skills, are comfortable making decisions and find the opportunity to make big financial decisions thrilling rather than stressful, knowing how to become a portfolio manager could be the start of the exhilarating new career you have been seeking.

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